Solar Panels and a Claremont Homeowners Policy

A rooftop solar array is a substantial piece of equipment bolted to the single most underwriting-sensitive surface on the house. It changes what the structure is worth to rebuild, it may or may not belong to the homeowner, and it interacts directly with the roof beneath it. Most owners never mention it to their insurer, and most of the problems in this area begin there.

This article extends the insurance guide. It is written by a real estate professional, not an insurance broker, an adjuster, a solar installer or a roofer. Whether an array is covered, by which policy, and what any claim would pay are questions for the carrier in writing, for a licensed insurance professional, and for the party that actually owns the equipment. Consumer questions can go to the California Department of Insurance.

The first question is ownership

Everything downstream depends on it, and it is not always obvious from looking at the roof.

OWNED OUTRIGHT, whether purchased with cash or financed. The array is generally the homeowner's property and the insurance conversation is a conversation with the homeowner's carrier about how it is treated.

LEASED, or subject to a power purchase agreement. A third party owns the equipment. That party's agreement will say who carries insurance on it, what happens if it is damaged, what the homeowner's responsibilities are and what happens at a sale. Those answers are in the agreement, not in a homeowners policy, and the agreement is the document to read.

A homeowner who cannot say with certainty which arrangement they have should establish that before anything else, because a conversation with a carrier about equipment somebody else owns tends to produce confident wrong answers on both sides.

The roof underneath

This is the part most specific to insurance and the part most often ignored. The roof is already the component that carries the most underwriting weight, for the reasons set out in the article on roof age and insurance. Adding an array does several things to it at once.

It ADDS PENETRATIONS AND LOAD, which is why installation quality and workmanship documentation matter.

It COMPLICATES FUTURE ROOF WORK, because a covering replaced under an array involves removing and resetting the array, and that cost belongs to somebody.

It CHANGES WHAT AN INSPECTION SEES, since a photographic underwriting inspection cannot see roof covering that sits beneath panels.

The practical consequence is a sequencing rule that applies to any owner considering solar: settle the roof question first. Installing over a covering near the end of its service life converts a straightforward future reroof into an expensive one.

What to report, and why owners do not

An array is an improvement to the property and it typically changes the cost to reproduce the structure. That is precisely the kind of change that should reach the carrier, for the reasons described in the article on setting dwelling coverage. Carriers do not audit their book for improvements. If nobody reports it, the property continues to be evaluated as though it were not there.

What to ask a licensed insurance professional, in the owner's own words and about the owner's own policy: how the array is treated under the policy, whether it needs to be identified, whether any endorsement is involved, and whether the dwelling limit reflects it. Then get the answer in writing from the carrier. Do not accept a general reassurance, from any source including this one, as an account of a specific policy.

The battery, if there is one

Storage is separate equipment with its own characteristics and its own placement questions, and it is worth raising specifically rather than assuming it travels with the panels in any discussion. The same applies to any electrical work that accompanied the installation, which belongs in the property file alongside the panel and service documentation described in the article on what underwriters ask an older home.

Inside a Claremont transaction

Solar is common enough here that it turns up regularly in escrow, and it produces a predictable set of tasks.

For BUYERS: establish ownership status in week one, obtain the actual agreement if the array is leased or under a power purchase arrangement, read the transfer provisions, and bring both the array and the roof to the licensed broker at the same time as the address. An array is not usually the thing that stops a placement, but it is regularly the thing that delays one because nobody could produce the paperwork. The week-by-week sequence is in the article on binding coverage in escrow.

For SELLERS: assemble the solar file before listing. The installation contract or lease, the permit record, the workmanship and product documentation, the electrical work, and any roof documentation from the same period. A seller who can hand that over removes a whole category of mid-escrow friction; a seller who cannot has handed the buyer a research project on a deadline.

The takeaway

Know who owns the array. Read the agreement if it is not the homeowner. Settle the roof before installing and document the installation afterwards. Tell the carrier the array exists and get the treatment in writing. Keep the file with the house so it transfers. And take every question about coverage, limits, endorsements and what any claim would pay to a licensed insurance professional and to the carrier, which are the only sources that can speak to a specific policy on a specific roof.

What happens to coverage during the installation work itself is related to the subject of the article on renovating a Claremont home. Anthony Grynchal has been licensed in California since November 2009.